Education Savings Account (ESA)

Ask a question, open ESA

Education Savings Accounts allow you to save money for a child's education. ESA features are:

  • You can deposit into an FDIC-insured certificate of deposit with terms of 1 to 5 years at fixed rates. CURRENT DEPOSIT RATES.
  • To make a contribution: Contact any DSB location. Annual contribution limit is $2,000 per beneficiary. Depositor can make multiple contributions during a tax year until limit is achieved. Designated beneficiary must be an individual under the age of 18.
  • Contributors can be any entity, such as an individual, employer, corporation nonprofit group. Contributions may be made by individual after age 70 1/2.
  • Contributions do not count against the limits for IRAs.
  • Earnings are not taxed and grow tax-free. No tax deduction for annual contributions is allowed by law.*
  • Contribution deadline is the contributor's tax filing deadline (example: contributions for tax year 2021 can be made until April 15, 2022).
  • Married couple filing a joint tax return may contribute so long as their adjusted gross income does not exceed $220,000. Such contribution may be limited if the couple's adjusted income falls into a phase-out range of $190,000 to $220,000.
  • Beneficiary can receive annual contributions from CESA and qualified state tuition program, such as a Section 529 plan. Beneficiary may take distributions from both programs in the same year.
  • To make a distribution: Contact any DSB location. Funds may be used to pay qualified elementary, secondary and higher education expenses. This includes kindergarten through grade 12 administered by a school (public, private or religious), as well as for higher education at college and universities. Consult IRS for most current list of qualified expenses. Required distributions must be complete 30 days after beneficiary reaches age 30 or dies.
  • Electronic notice delivery (optional). 


    *Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved. If you have questions regarding accounting issues specifically related to your personal or business circumstances, you should consult with your own professional tax advisor, accountant, attorney, industry expert or professional association.